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The National
5 days ago
- Business
- The National
Experts warn Labour's pension reforms pose 'high risks' for savers
Chancellor Rachel Reeves last week unveiled a new policy to force pension pots to operate at 'megafund' levels, in a bid to free up money for investment to get around her self-imposed borrowing rules. The changes will mean that pension funds will be encouraged to move away from their traditional safe investments such as government bonds into high-risk and high-reward private capital markets. But experts predict that this puts savers' money at heightened risk and could jeopardise retirement plans – as well as putting extra strain on the public finances. The Treasury has hailed the plans as both unlocking investment, which it hopes will boost the flagging British economy, as well as delivering higher returns for savers. Dr King Omeihe, a senior lecturer at the University of the West of Scotland's business school, said that on the face of it, the plans seemed like a 'win-win'. However, because defined contribution pensions – where savers are not guaranteed a return – are dominant in the UK, gambling the money in turbulent markets puts cash at greater risk than traditional pension investment strategies, he warned. Dr Omeihe said: 'When you channel these funds into private markets such as early-stage businesses or infrastructure and private equity, there is that potential for high-growth returns. But high returns also mean high risks, so what that means is there is a high degree of volatility. 'Markets can swing widely and they are often much harder to predict than traditional investments. 'If things go well, people's pension pots could grow faster, retirement could come with more financial comfort. But if it doesn't, the savers risk reaching retirement with retirement pots lower than expected.' The academic called on the UK Government to introduce 'concrete' protections for savers to accompany the reforms, saying: 'These pots are not just abstract pots of capital, these are people's lifetime savings and people deserve that growth and that security.' Parallels have also been drawn between the Government's liberalising reforms and the conditions which led to the subprime mortgage crisis in the US, which triggered the 2008 global financial crisis. Both the lending crisis and Labour's pensions reforms involve investors gambling with money which is intimately tied to people's everyday lives. Subprime mortgages allowed people who would otherwise not have been able to afford to buy houses to do so – however, when that money was called in by the banks, many found themselves unable to keep up with repayments and had their homes foreclosed. Dr Omeihe said: 'You look at the subprime mortgage crisis in 2008, there was this strong political push to unlock capital. This was done through housing, mortgage-backed securities. What we are seeing now is pension megafunds are being promoted as tools to spread risk and boost returns. 'Subprime borrowers at that time didn't understand what they were signing up for and similarly, today, many pension savers don't have insider control over where their money is being invested and especially in private markets where, I think, there are sometimes opaque valuations.' He added: 'There is strong political enthusiasm to invest in Britain, just as there was political will then in the US to expand homeownership. But that overconfidence in the markets can either self-correct or sometimes it can blind policymakers to potential vulnerabilities.' Dr Isaac Tabner, a senior lecturer in finance at Stirling University, echoed Dr Omeihe's concerns about the risk savers will be exposed to by having their money invested in private markets, warning that in the event of a market crash, defined contribution savers could take a 'major hit'. He also raised concerns about the Treasury's designs to free up capital to be invested into British businesses – saying this 'concentrated' risk in one place. Announcing the plans, the Treasury bemoaned the fact that only 20% of defined contributions assets were invested domestically, compared with 50% in 2012. Dr Tabner said: 'It's fairly well-established that if you're investing, you benefit from international diversification. You're not putting all your eggs in one basket. 'A lot of studies show that even US investors benefit from buying overseas investments and the US is obviously the largest equity market and one of the largest economies in the world. 'Britain is a much smaller economy, so relative to the size of the world investment portfolio, it makes sense that UK investors would probably have between 5-10% of their savings invested in the UK market and the rest overseas, from a risk-management perspective. This proposal seems to fly in the face of that from an investors' point of view.' He argued that encouraging pensions to invest in the UK economy may be beneficial in the immediate term by increasing growth, it 'may do so at the expense of currently retired or future retired' workers. Dr Tabner also raised further concerns about the impact the reforms may have on the bond market, which influences interest rates. (Image: PA) Pension funds have traditionally invested in government bonds because they are seen as a safe investment. But a decline in demand, fuelled by pension funds abandoning bonds in favour of higher-return investments, may push up interest rates, Dr Tabner warned. This would, he added, make it more expensive for companies to borrow money. And by pushing funds to invest in British businesses, Dr Tabner said there was a risk that it could compound savers' losses if there is a market crash at the time they plan to retire. He drew a parallel with the collapse of the company Enron, which saw employees lose both their incomes when the firm went under and their savings because they had been encouraged to buy company shares which became worthless. However, the plan does have backing among titans of finance, including Michael Moore, the head of the British Private Equity and Venture Capital Association, who described the plans as a 'win-win' for both the economy and savers. He said that evidence from Canada and Australia, which have pursued similar agendas, showed how the reforms would 'help the national economy and deliver better retirement outcomes'. A Treasury spokesperson said: 'Savers' interests are at the heart of our pension reforms. Pension funds have already committed to private market investment targets voluntarily, due to the potentially higher returns and security for savers through diversified asset holdings that they offer.'
Scottish Sun
23-05-2025
- Business
- Scottish Sun
Scots university to axe 75 jobs as staff left ‘upset & angry' amid ‘eye-watering' boss travel expenses claims
It comes weeks after their top boss was slammed by politicians Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) A SCOTS university has sparked fury after announcing plans to axe 75 jobs, leaving staff 'upset and very angry.' The University of the West of Scotland (UWS), which employs around 2,000 staff across campuses in Paisley, Ayr, Dumfries, Hamilton, and London, is under fire as it battles a financial crisis. Sign up for Scottish Sun newsletter Sign up 4 Paisley campus of the University of the West of Scotland were jobs are at risk Credit: Getty 4 The University of West of Scotland has a campus in Ayr Credit: Alamy 4 Professor James Miller was slammed by politicians for his "eye-watering" travel expenses Credit: Crichton Foundation Bosses say the cuts, equivalent to 75 full-time posts, will save £6.2 million after the uni posted a £14.4 million deficit for 2023/24 and agreed an £8.4 million deficit for this year. It is not yet known which types of jobs will be cut, but it is understood that a number of part-time roles could be reduced, taking the cull tally higher than 75. The announcement has been slammed by union chiefs, with the EIS, which represents academic staff, now moving towards a strike ballot over how the decision was handled. Catherine Clarke, EIS deputy branch secretary, said: "Staff are upset and very angry about the way they've been informed and the way it's been handled. "The joint trade union position is that there is no financial case for this." The unions will seek to restart discussions with university management in the coming days. It comes after UWS Principal and Vice-Chancellor Professor James Miller was criticised for racking up £37,429 in travel expenses over the past two years. His trips included visits to Dubai, Kuala Lumpur, and South Africa. A trip to Barbados cost £5,970 for flights and hotel accommodation in November 2023. Politicians previously blasted Miller for splashing cash on the "eye-watering" luxury trips while hundreds of staff face losing their jobs. Major Scots university to axe 632 jobs as staff left 'in tears' Scottish Conservative shadow cabinet secretary for education and skills Miles Briggs said: 'Eyebrows will be raised at this spending on overseas trips while the university faces cuts." Scottish Labour Education spokesperson Pam Duncan-Glancy added: "At a time when university finances are stretched to breaking point and jobs are at risk, it is vital that every penny is being spent wisely." A UWS spokesperson said: "Our organisational change project is designed to put our university finances on a more sustainable footing, to enable an even better student experience and enhanced graduate outcomes. "In common with the rest of the higher education sector across the UK, the university is operating in a very challenging financial environment exacerbated by external factors that have driven a significant change in the size and shape of our student population, and the associated funding." The uni added that the period of consultation of redundancies would last for a minimum of 45 working days. Bosses hope to return the university to a surplus in 2026/27.
Daily Record
18-05-2025
- Business
- Daily Record
Boss of cash-strapped Scots uni who enjoyed Barbados junket faces no confidence vote
The Sunday Mail revealed the University of the West of Scotland's Professor James Miller claimed £37,429 in travelling expenses over the last two years visiting exotic locations. The head of a cash-strapped university is facing a vote of no confidence from staff after the Sunday Mail revealed he spent more than £37,000 on foreign junkets. We told how fat cat Professor James Miller, principal and vice-chancellor of the University of the West of Scotland (UWS), claimed an astonishing £37,429 in expenses over the last two years visiting exotic locations which included Dubai, Kuala Lumpur and South Africa. The revelations come as lecturers at the UWS have voted in favour of industrial action over compulsory redundancies at the university after the institution recorded a £14.4million deficit in 2023/24. The 61-year-old uni boss, who earns £288,000 a year including pension contributions, is among 12 senior uni staff - who have claimed more than £163,000 in expenses in less than two years. The USW have again refused to confirm to the Sunday Mail which luxury hotels the professor stayed in on foreign trips or whether he flew business class. They also confirmed Professor Miller had the use of a car and driver for work - but denied he had a 'chauffeur'. The lavish spending was criticised by unions who said a vote of no confidence would be put to members at the university and that members would move to strike. UNISON regional organiser John Mooney said: 'Our members have had enough and have voted to be issued with strike ballots. 'This spending on executive's international travel, while the deficit rises by millions of pounds and they cut jobs and student services shows an astounding level of mismanagement. 'The unions are making every effort to try to protect what jobs they can and find agreements on voluntary redundancies. 'We will move towards a full strike ballot and will put a vote of no confidence to our members at the university.' In an indicative ballot which closed last week, 85per cent of EIS members who voted backed industrial action over compulsory redundancy at the university. Assistant General Secretary David Belsey said: 'The members at UWS have collectively delivered a strong turnout and clear message to the university – no compulsory redundancies. 'This result should leave UWS management under no illusions about the strength of feeling amongst EIS ULA members and their willingness to take action to defend jobs.' We revealed last week that a trip to Barbados by Prof Miller for 'a Strategic Partnership Agreement' cost £5970 for flights and hotel stays in November 2023. In October 2023 Professor Miller spent £5631.09 on a trip to attend COP28 Partnership Meetings in Dubai and £5867.28 on return flights to South Africa to present at the GEC+Africa 2024 Congress last February. Other expenses included trips to Nigeria, Dubai, the Malaysian capital Kuala Lumpur as well to New York. Shadow Tory education secretary Miles Briggs: 'This lavish spending from top bosses has rightly angered other staff and students. 'At a time of looming job cuts senior figures astonishingly still thought it was appropriate to spend such levels of money on international visits.' UWS has campuses in Ayr, Dumfries, Lanarkshire, London and Paisley and employs around 2000 staff and had a student headcount of 21,000 in the 23/24 academic year. In April the Scottish Funding Council (SFC) announced its teaching allocations for higher education institutions at £727m for the 2025-26 academic year. The same month both EIS and Unison opened indicative ballots for strike action at UWS. Join the Daily Record WhatsApp community! Get the latest news sent straight to your messages by joining our WhatsApp community today. You'll receive daily updates on breaking news as well as the top headlines across Scotland. No one will be able to see who is signed up and no one can send messages except the Daily Record team. All you have to do is click here if you're on mobile, select 'Join Community' and you're in! If you're on a desktop, simply scan the QR code above with your phone and click 'Join Community'. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'.
Scotsman
11-05-2025
- Business
- Scotsman
‘Cash-strapped' Scottish university boss claims over £37k in trip expenses - including on Barbados visit
Vice-chancellor Professor James Miller has claimed almost £40,000 on visiting destinations including Barbados and Kuala Lumpur. Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The vice-chancellor of a Scottish university where staff face job losses has claimed thousands in expenses on overseas trips, it has been revealed. Professor James Miller, principal and vice-chancellor of the University of the West of Scotland (UWS), has claimed £37,429 in travel expenses in the past two years, the Sunday Mail has reported. Advertisement Hide Ad Advertisement Hide Ad A total of £5,970 was claimed on a trip to Barbados in the West Indies. Other destinations visited by the university boss included Dubai, Kuala Lumpur and South Africa. Details of the expenses have emerged at a time when staff at the university are balloting for strike action due to possible job loss. The university reported a £14.4 million deficit in 2023/24. Prof Miller, whose salary is £288,000 a year, is among 12 senior staff at the UWS who have claimed more than £163,000 in expenses in two years. Advertisement Hide Ad Advertisement Hide Ad A spokesperson for the UWS said: 'Like all universities, growing our income through onshore international student recruitment and global transnational education is essential to the financial sustainability of the university and necessitates travel, the cost of which is more than offset, by orders of magnitude, through the income secured – income that funds several hundred jobs.' The University of the West of Scotland The university did not confirm whether Prof Miller had flown first class, business or economy for the trips. The scale of the expenses bill has been criticised by politicians, with Scottish Labour education spokesperson Pam Duncan-Glancy saying : 'At a time when university finances are stretched to breaking point and jobs are at risk, it is vital that every penny is being spent wisely. 'Right across Scotland, universities are facing financial challenges, but the SNP is stuck defending a broken status quo. Advertisement Hide Ad Advertisement Hide Ad 'Scottish Labour is working with the sector to develop a new funding model that will provide young Scots with opportunities and allow our world-class universities to thrive.' Scottish Conservative shadow cabinet secretary for education and skills Miles Briggs added: 'Eyebrows will be raised at this spending on overseas trips while the university faces cuts. 'But the entire further education sector is under pressure for every penny thanks to the SNP Government's failure to produce a realistic funding model.' Industrial action has become a trend at universities across the country outside of just the UWS. Hundreds of staff at the University of Strathcylde went on strike in March in defence of their pensions. Advertisement Hide Ad Advertisement Hide Ad The Unite members at the University of Strathclyde said the industrial action was in response to the intensification in the pension dispute following last-minute attempts by the higher education institution to row-back on its initial proposals. Last month lecturing staff at Robert Gordon University launched strike action amid a dispute over job cuts. And a march and rally was held by union Unite last month on behalf of staff striking at Dundee University over hundreds of planned job cuts. The number of jobs to be cut at Dundee University has dropped by half as part of a revised recovery plan to deal with a £35 million deficit. But 'up to 300' full-time equivalent position are still expected to be lost through a voluntary redundancy scheme. Advertisement Hide Ad Advertisement Hide Ad
Scottish Sun
11-05-2025
- Business
- Scottish Sun
Scots uni boss slammed over ‘eye-watering' travel expenses as staff face job losses
One politician said 'eyebrows will be raised' Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) A SCOTS uni boss has been slammed by politicians for splashing out on trips abroad when hundreds of staff at the institution face job losses. Professor James Miller, Principal and Vice-Chancellor of the University of the West of Scotland (UWS) claimed £37,429 in travel expenses over the last two years. Sign up for Scottish Sun newsletter Sign up 2 Professor James Miller claimed £37,429 in travelling costs Credit: Crichton Foundation 2 It comes as lecturers and staff ballot for potential strike action Credit: University of the West of Scotland This includes trips to Dubai, Kuala Lumpur and South Africa, reports the Sunday Mail. Lecturers and staff are balloting for potential strike action after the uni posted a deficit of £14.4million in 2023/24. UWS refused to confirm whether Professor Miller travelled on first or business class flights. Politicians slammed the costs as "eye-watering" amid difficult times for the university. Scottish Conservative shadow cabinet secretary for education and skills Miles Briggs said: 'Eyebrows will be raised at this spending on overseas trips while the university faces cuts." Scottish Labour Education spokesperson Pam Duncan-Glancy added: "At a time when university finances are stretched to breaking point and jobs are at risk, it is vital that every penny is being spent wisely." A trip to Barbados cost £5,970 for flights and hotel accommodation in November 2023. This was for "a Strategic Partnership Agreement" and saw the signing of a Memorandum of Understanding (MoU) between The University of the West Indies (UWI), Cave Hill Campus and UWS. £5,631.09 was also spent by Professor Miller on flights and accommodation to attend COP28 Partnership Meetings in Dubai and £5,867.28 on return flights to South Africa. A journey to Abuja, Nigeria, came in at £5,058.81 and a trip to Dubai for graduation ceremonies cost £3,717.98. Major Scots university to axe 632 jobs as staff left 'in tears' A spokesperson for the UWS said: "Like all universities, growing our income through onshore international student recruitment and global transnational education is essential to the financial sustainability of the University and necessitates travel, the cost of which is more than offset, by orders of magnitude, through the income secured – income that funds several hundred jobs." A Scottish Government spokesperson added: "Universities are autonomous institutions and matters relating to remuneration and expenditure are for them to determine. "Scotland's universities make a valuable contribution to our economy and wider society. Ministers listened closely to the sector in the development of this year's budget, and we are investing over £1.1 billion in university teaching and research in 2025-26. "Ministers continue to engage with the sector and are open to exploring the future funding model of universities, but we are clear that this Government will not reintroduce tuition fees. "Access to higher education must be based on the ability to learn, not the ability to pay. Broader financial pressures facing the sector remain, including the UK Government's migration policies, employee National Insurance contributions, and inflationary pressures."
